Our ABC, Our Future. A message from Mark Scott.

The ABC has today announced a range of proposed measures to reposition the Corporation for current and future challenges and help the national broadcaster respond to funding cuts announced by the Federal Government.

These changes will ensure the ABC maintains a clear focus on its audience, which remains at the centre of every activity, as well as its Charter obligations.

The Federal Government confirmed last week that the ABC’s funding will be cut from July 2015 by more than $200 million over four years. This is on top of cuts already imposed in the May budget.

It means job losses across the Corporation – about 400 people, or ten per cent of the workforce – and changes to the way the ABC operates, including content and programming.

To meet the funding reduction, the ABC must transform its operational base and continue to drive efficiencies.

This is not new to the Corporation. It is a legal responsibility of the ABC Board to ensure that functions are performed efficiently, with the maximum benefit to the people of Australia.

This commitment to efficiency has helped fund key initiatives like News 24 and iview. These initiatives have been critical to the development and relevance of the ABC at a time of intense competition in the media sector.

The proposals announced today form an integrated package: they are a whole-of-ABC response to funding issues and audience strategy. They recognise that programming cannot stay frozen; that audience dynamics drive reinvestment decisions and that repositioning necessitates tough decision-making and execution.

Efficiency savings

There are more than 40 proposed efficiency measures that will transform the operational base of the ABC and provide the bulk of the savings that the Federal Government has imposed.

They are designed to deliver savings with minimal adverse cost impact – scooping up the benefits of collaboration, harnessing technology, modernising the business and better resource allocation.

The measures address:

Procurement. The ABC will systematically review key contracts to extract efficiencies and explore joint purchasing arrangements with its colleagues at SBS

Property holdings. The ABC is exploring various options to get savings out of its property portfolio. It will sell Lanceley Place in Sydney and close five of its smallest regional radio stations that operate as virtual outposts

Systems and processes. The ABC will streamline and automate its rostering, performance and other HR paper-based systems, easing bureaucratic demands on staff

Key tasks like switchboard and mail room activity. The ABC will centralise the former and reorganise the latter to yield savings; and

Audience and marketing strategies. The Audience and Marketing Division, which was centralised in March, will find efficiencies by aligning more closely with priority content and brand initiatives.

Management will also be stripped back. Management and administrative ranks comprise more than 10 per cent of the proposed redundancies. In mid-2015, the ABC will propose dismantling the state and territory director structure and look at new ways of handling local administrative and stakeholder responsibilities.

These proposed efficiency measures will deliver substantial savings. However, the very nature of the media business means that some savings inevitably impact content. The ABC must also focus on where and how it can best add value in its processes and content creation.

The ABC has proposed:

Closing the Adelaide television production studio and winding back remaining production activities in the smaller states (outside news and current affairs). The ABC will continue to work closely with the independent sector to produce programs like The Code (ACT), ANZAC Girls (WA) and The War that Changed Us (SA) that have strong local flavours. We will strive to produce programming that better reflects local diversity in each state and territory. To demonstrate its commitment, the ABC will deliver annual reports on its local production.

Closing five of our smallest regional radio posts in Wagin, Morwell, Gladstone, Port Augusta and Nowra. They are expensive to maintain, there are no content implications and minimal staff impact.

Ceasing state-based local sports coverage. With the ABC facing declining audience interest in local sport competitions and some codes chasing commercial opportunities, ABC Television is revising its sports strategy to ensure the most cost-efficient use of resources and optimal audience impact; and

Rationalising our television outside broadcast vans.

Structural change to deliver for our audiences

The ABC has also considered how it can provide maximum value for audiences across the country and deliver content of relevance to its viewers, listeners and readers. With commercial media struggling to maintain its presence in regional Australia,it is even more necessary for the ABC to ensure it delivers for these audiences.

To this end, the ABC has proposed a new Regional Division, which will deliver a co-ordinated and focussed approach to rural and regional content for audiences across the nation. It will bring together regional radio and news staff and be led by a manager living outside Sydney or Melbourne.

The ABC will also replace its Innovation Division with an ABC Digital Network Division, with the aim of prioritising our online and mobile expenditure.

The new division will bring our digital designers, UX, digital project managers and developers together to maximise our investment in this competitive audience space. It will ensure we are better placed to identify audience trends and respond to them with new and enhanced products and services.

ABC Digital Network is the key to improving the skills of our digital specialists and unlocking a better audience experience: it means better search, single sign-on, better recommendations, localisation, segmentation, profiling and navigation. These areas are vital to keeping our audiences connected and our services relevant.

Content reinvestment

The budget cuts represent a real opportunity cost for the ABC. The efficiency savings normally used to finance our digital reinvestment are now being returned to the Federal Government’s general revenue.

This presents a challenge for the ABC, which strives to reach a demanding and fickle audience in a competitive industry, by continually reinvesting our efficiency savings in new content.

Broadcasting is not and never has been a static industry. Each year, content divisions sit down to map out their plans, taking into account audience trends, technological developments, budgets, and the tactics of others in their respective markets. Programs are changed, cancelled and replaced. Staff are reassigned, resources re-allocated. This is part of the normal cycle of business.

ABC TV, Radio, News, Online and International have identified programming savings that they can reinvest in new content priorities. Over the next few years, about $20 million will be placed in an investment fund, set up to fund new content.

The creation of ABC Digital Network is the first of our reinvestment priorities, with other initiatives rolled out as savings become available. The initiatives include:

The upgrading of our innovative catch-up TV service. iview has become an important platform for viewers of every age. We will enrich the audience experience with fast-feature development, improved personalisation, 24-hour support, capacity for audience recommendations and the development of stand-alone content

Exploring the potential for new video streaming and transaction-based services

New investment in News Digital, including extending our capacity for breaking and rolling news coverage to online and mobile audiences and building digital newsgathering skills within our metropolitan newsrooms and our current affairs and international teams. News will also create Australia’s first mobile-led newsroom, in the ACT; and

The extension of radio streaming to regional areas and the development of the personalised radio player that enables listeners to draw in content from across the ABC’s array of services and to access it in one location.

In this way, the money saved in programming will be reinvested back into programming.

Programming Changes

As mentioned earlier, ABC TV will cease Adelaide television production and state-based local sports coverage.

ABC News has proposed launching a new, national end-of-week edition of 7.30, replacing the state editions, and delivering more state coverage throughout the week across all platforms.

Lateline will shift to a new more time-friendly fixed slot on News24 (while also airing on ABC TV in 2015) where it can build the audience it deserves.

News has proposed readjusting the shape of its foreign bureaux but will continue to recognise the importance of the ABC’s investment in foreign coverage at a time of 24/7 news demand and the challenges posed by convergence. Other measures include creating a new National Business Team to boost business and finance coverage across all platforms and better tailoring radio news output to match audience needs.

ABC Radio will acknowledge the new climate by cutting back on the number of concerts recorded on Classic FM. There will be proposed programming changes and staff cuts in Radio National and Local Radio. The changes to Radio National aim to reshape the structure and flow of programming across the middle of the day and to rethink delivery of documentary content. However, the majority of radio savings are in administration and management.

The need for digital reinvestment does not preclude the search for efficiencies in that area. The ABC will rationalise its websites, with the goal of closing down more than 100, and consolidate content into websites that generate the most traffic, like ABC News, to present our stories to wider audiences.

ABC into the future

Many of the initiatives outlined today are still in the planning stages, but all are designed to help position the ABC for a challenging future.

The package of proposed measures recognises that, in a context of demand for access to different services and reduced funding, the ABC must further prioritise choices.

They provide funds to invest in essential new online and mobile strategies that better connect the ABC with its audiences. Like the best media companies across the globe, the ABC is using its digital expertise to achieve deeper and broader audience engagement and relevance.

The ABC has grown remarkably since it launched on 1 July 1932. This is a snapshot of our achievements, programs and personalities and celebrates the ABC's contribution to Australian life for more than 80 years.